What may be confused is Rare vs valuable.

The R scale, which is used across many areas, is simple enough. Even the Dale Seymour book has a scarcity / price chart. Without copying the whole list, It's "Extremely Rare" (often one of a kind), Rare, Scarce, Uncommon, Average, Common, Very Common. (there are other price distinctions within these groups)

I agree with you that people often label chips as rare, when they are simply limited editions, and average.

The old version of "What's this worth..." Answer, "Are you buying or selling?"

Demand will change with area, as you and others have pointed out. My favorite is Betty Boop, which is not rare, but still offered for $35 ea. Some less common chips, are pushing it at $20? All in the image and the demand.

Far too often, items on eBay are listed as Rare, when anyone mildly interested in chips will knows they are average or uncommon at best. Some are even common chips, or Faux chips!

The rarity scale is just fine, but personally rare means exceedingly uncommon.

Of course, some old 50c chip from WI is always rare, when I'm selling it, and common if I'm buying it. HA HA